SINGAPORE (July 8): Refinitiv, one of the world’s largest providers of financial markets data and infrastructure, has launched the Lipper Fund ESG Scores to help provide data comparisons at the fund level for sustainable investing, on Wednesday.
The Refinitiv Lipper Fund ESG Scores creates fund scores on over 19,000 unique portfolios representing US$15.7 trillion in total net assets across equity, bonds and mixed funds.
This is done by combining Lipper’s 330,000 fund share classes and its deep holdings content, as well as with ESG coverage on over 9,000 companies representing of 80% of market capitalisation around the world, with Refinitiv’s proprietary scoring methodology which factors in issues such as materiality and transparency stimulation.
The Refinitiv Lipper Fund ESG Scores is also designed to transparently and objectively measure ESG performance, commitment and effectiveness across 10 main themes including emissions, environmental product innovation, and human rights. The measurements are based on publicly-reported data on constituents within the fund across the three pillars environmental, social, and governance.
The scores incorporate two overall ESG scores in the model.
The ESG score measures company’s or fund’s ESG performance based on verifiable reported data in the public domain, whereas the ESG combined score overlays the ESG score with impact of negative events to provide a comprehensive evaluation on the company’s sustainability impact and conduct in near real time.
“It has become imperative for financial markets to address [climate change] so investors can direct funds to transitionary projects and away from high carbon and carbon-equivalent industries, and to meet an increasing number of regulatory mandates,” says David Craig, CEO of Refinitiv.
“Sustainable finance isn’t just a political or social choice — it’s a smart business decision. Refinitiv is proud to play its part in encouraging this transition by providing trusted data and analytics to investors, traders and advisors so they can evaluate ESG performance and allocate capital,” he adds, explaining that ESG scores are a “uniquely effective” way to assess performance across industries and serve as an objective and impartial assessment of the importance of each ESG theme to different industries.
